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HMRC internal manual

Employment Status Manual

Basic principles: when the legislation at Chapter 8 ITEPA 2003 applies

THE FOLLOWING PAGES UP TO AND INCLUDING ESM8280 RELATE ONLY TO ENGAGEMENTS WITHIN CHAPTER 8 ITEPA 2003

Paragraphs 1 and 2 Schedule 12 Finance Act 2000/Sections 49 and 50 ITEPA 2003

Regulation 6 SI 2000 No.727

The legislation applies where;

  • a worker provides services to a client under arrangements involving an intermediary in circumstances such that if the contract had been made directly then the worker would have been;
    • for income tax purposes, an employee of the client;

    • for NICs purposes, employed in employed earner’s employment by the client.

  • the arrangements for these services are not made directly with the client but through a third party (known as an intermediary);
  • if the services had been provided under a contract between the client and the worker, the worker would have been regarded as an employee/employed earner of the client. For NICs purposes, see ESM8110 onwards regarding situations where the client is overseas.
  • the worker, or an associate of the worker, receives or is entitled to receive a payment or other benefit from the intermediary that would not otherwise have been chargeable to tax as employment income, and
  • the conditions of liability are satisfied according to the type of intermediary (see ESM8040 onwards).